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More Austerity Seen Coming For Greece

troika33Greek Prime Minister Antonis Samaras may yet have to break his promise not to impose more pay cuts, tax hikes and slashed pensions on beleaguered Greeks because of a billion-euro hole in the country’s budget in the wake of privatization failures and an overwhelmed health care system.
The newspaper Kathimerini said it had seen a revised memorandum between Greece and the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which calls for new austerity measures unless revenues can be raised in other ways.
That would put Samaras and his new alliance government between his New Democracy Conservatives and the PASOK Socialists, who have a bare majority of 153 seats in the 300-member Parliament in a tough spot, forcing him to renege on yet another vow and bring the hammer down again on Greeks who’ve endured three years of tough conditions already.
According to the draft document, unspecified new measures may have to be taken if authorities fail to collect adequate revenue from outstanding debts to the state with tax cheats running wild, and if the government can’t plug a funding gap for this year of just over 1 billion euros ($1.3 billion,) chiefly attributed to the debts of the country’s main healthcare provider, EOPYY.
One potential method of narrowing the funding gap likely to be proposed by Troika officials is the payment of the doubled emergency property tax – which was supposed to be for one year and is now in its third – for 2013 in four installments rather than five. Such a move would narrow the funding gap for this year by an estimated 400 million euros ($520.83 million,) Troika officials are expected to argue, without explaining how people who don’t have the money to pay it will be forced to anyway.
Another sticking point in talks between Troika envoys when they return to Athens early in July is its demand for another 12,500 public workers to be fired along with the 2,656 let go from the state broadcaster ERT that was summarily shut down on June 11 on five minutes notice and remains closed despite a court order its signal be restored while the government sets up a NERIT, a replacement agency, with just 1000-1200 workers.
The additional workers to be let go would be placed in a so-called mobility scheme with further reduced wages for a year before being fired. A list has yet to be finalized despite the Troika’s insistence the pace be picked up. New Administrative Reform Minister Kyriakos Mitsotakis is expected to ask the Troika for a two-month extension for the completion of the scheme.
The draft memorandum also foresees some relief, with recruitment in the state sector – on a strict ratio of one departure to one hiring – as well as the introduction of certain tax breaks to help draw much-needed investment.
It remained unclear whether the Troika will accept a repeated request from Samaras to let Greece lower the Valued Added Tax, raised to 23 percent, to 13 percent for restaurants to help Greece capitalize on what the government hopes will be a record tourist season and rebound fro a a disappointing 2012 in which visitors stayed away in the wake of protests, strikes and riots against austerity.
While that was going on, Samaras was telling a congress of his party’s faithful that all was well in Greece now and that the country will recover under his leadership. But addressing the members, the former Mayor Athens, Nikitas Kaklamanis called for a Parliamentary inquiry to determine how the country signed its first bailout in 2010 when PASOK was in power, creating potential embarrassment for Samaras’ new Deputy Prime Minister, Evangelos Venizelos, who served as a finance minister in that government which signed the Troika deal.

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